- Record Quarterly Net Revenue of $50 Million for Q3 2023, Up 48%
from Q3 2022
- Raises Full-Year 2023 Net Revenue Guidance from $185 to $195
Million to $194 to $198 Million
- Operating Use of Cash in Q3 of $0.9 Million, Demonstrating
Continued Progress Towards Achieving Profitability1 with Existing
Liquidity
- “Extra-Strength” 40U Formulation of Jeuveau® Demonstrates
Effects Lasting 26 Weeks in Phase II Data Presented at 2023
American Society of Dermatologic Surgery Annual Meeting
Evolus, Inc. (NASDAQ: EOLS), a performance beauty company with a
focus on building an aesthetic portfolio of consumer brands, today
reported financial results for the third quarter ended September
30, 2023.
“The record results of our third quarter reflect the continued
strength in sales and consistent execution of our long-term growth
strategy,” said David Moatazedi, President and Chief Executive
Officer. “Notably, we achieved record quarterly revenue of $50
million, an increase of 48% over the prior year period in what is
typically our seasonally lowest quarter. Due to the strong results
and continuing momentum, we are increasing our full-year 2023
revenue guidance from between $185 to $195 million to between $194
to $198 million, which equates to over 30% growth for the fiscal
year. We continue to exercise disciplined operating expense
management and we remain committed to reaching profitability1 in
the fourth quarter, excluding our investments related to Evolysse™
and profitability1 including the filler line in 2025.”
Third Quarter 2023 Highlights and Recent Developments
- The company’s key performance indicators demonstrated continued
strong momentum during the third quarter.
- Evolus added over 650 new customer accounts in the quarter,
bringing the total number of customers purchasing since launch to
approximately 11,600. The reorder rate among customers remains
above 70%.2
- Members in the Evolus Rewards™ consumer loyalty program grew by
62,800 to 671,000.3
- Total redemptions for the quarter hit an all-time high of more
than 149,000 driven by continued demand from existing patients
receiving repeat treatments at the rate of 60%, which demonstrates
sustained brand loyalty.
Third Quarter 2023 Financial Results
- Total net revenues for the third quarter of 2023 increased 48%
to $50.0 million from $33.9 million in the third quarter of 2022
driven primarily by higher volumes of Jeuveau®.
- Gross profit margin and adjusted gross profit margin were 67.7%
and 69.1%, respectively. Adjusted gross profit margin, which
excludes amortization of intangible assets, was in line with
company guidance for the full year, as noted below.
- Operating expenses for the third quarter of 2023 were $63.5
million, compared to $64.5 million in the second quarter of
2023.
- Non-GAAP operating expenses for the third quarter of 2023 were
$40.3 million, compared to $42.7 million in the second quarter of
2023. Non-GAAP operating expenses exclude product cost of sales,
stock-based compensation expense, revaluation of the contingent
royalty obligation, and depreciation and amortization.
- Loss from operations for the third quarter of 2023 was $13.4
million, compared to $15.1 million in the second quarter of 2023.
Non-GAAP loss from operations in the third quarter of 2023 was $5.7
million compared to $8.0 million in the second quarter of 2023.
Non-GAAP loss from operations excludes stock-based compensation
expense, revaluation of the contingent royalty obligation, and
depreciation and amortization.
- Cash and cash equivalents at September 30, 2023 were $38.7
million compared to $41.7 million at June 30, 2023. For the third
quarter of 2023, net cash used for operating activities reached an
all-time quarterly low of $0.9 million, representing continued
progress toward cash flow breakeven. Evolus continues to expect its
existing liquidity will fully fund it to profitability1 in
2025.
Final Data from the Phase II Clinical Study with Jeuveau®
“Extra-Strength”
Final data from the Phase II clinical study evaluating the
“extra-strength” 40U dose for extended duration of Jeuveau®
(prabotulinumtoxinA-xvfs), the only neurotoxin dedicated
exclusively to aesthetics, were presented by study investigators at
the 2023 American Society for Dermatologic Surgery (“ASDS”) Annual
Meeting on November 3, 2023, in Chicago, and demonstrated 26 weeks,
or 6 months, of duration with the extra-strength dose of 40U across
multiple measurements.
“We are incredibly pleased to report the results of the
completed Phase II trial, which provides important insights about
the role of this formulation in achieving longer-lasting results,”
said Rui Avelar, M.D., Chief Medical Officer and Head of Research
and Development. “This data contributes to the body of knowledge
regarding the role of increasing dose and the impact on extended
duration and will be of interest to health care providers and
patients.”
“This is an important milestone for our company as we continue
on our long-term strategic journey to become a global performance
beauty company,” said Mr. Moatazedi. “The final results of our
completed ‘extra-strength’ study provide our growing consumer base
an option of a longer duration product which can help customers and
their patients achieve their desired results for longer.”
Jeuveau® is approved for the temporary improvement in the
appearance of moderate to severe vertical lines between the
eyebrows seen at maximum frown (glabellar lines) in adults below 65
years of age. Through the company’s TRANSPARENCY Clinical Program,
Jeuveau® was clinically proven to temporarily improve moderate to
severe glabellar lines or “11’s” in adults and included the largest
head-to-head pivotal study versus BOTOX®. The product is approved
for sale in the U.S. under the brand name Jeuveau® and in Europe
and Canada under the brand name Nuceiva® and received regulatory
approval in Australia in January 2023.
Outlook
- Evolus now expects total net revenues for the full year 2023 to
be between $194 and $198 million, representing year-over-year
growth of greater than 30% and magnitudes above the estimated
growth rate of the aesthetic neurotoxin market.
- The company continues to expect its adjusted gross profit
margin for the full year 2023 to be between 68% and 71%.
- Evolus continues to expect its full-year non-GAAP operating
expenses to be between $153 and $158 million.
- The company continues to expect to achieve positive non-GAAP
operating income on a consolidated basis in 2025 and remains fully
funded to expected profitability.1
- The company projects its total net revenue can reach $700
million by 2028, a compound annual growth rate of 29%, based on the
combination of its existing aesthetic neurotoxin business and
anticipated launch of the Evolysse™ HA dermal filler product line
beginning in 2025.
Conference Call Information
Management will host a conference call and live webcast to
discuss Evolus’ financial results today at 4:30 p.m. ET. To
participate in the conference call, dial (877) 407-6184 (U.S.) or
(201) 389-0877 (international) or connect to the live webcast via
the link on the Investor Relations page of our website at
www.evolus.com.
Following the completion of the call, an audio replay can be
accessed for 48 hours by dialing (877) 660-6853 (U.S.) or (201)
612-7415 (international) and using conference number 13741714. An
archived webcast, which will remain available for 30 days, can also
be accessed on the Investor Relations page of our website at
www.evolus.com.
About Phase II Clinical Study with Jeuveau®
“Extra-Strength”
The “Extra-Strength” Glabellar Line Study is a multicenter,
double blind, randomized trial that followed 150 patients until
they lost their correction or up to 12 months at five study sites.
The study includes two active controls – the currently approved 20
units of Jeuveau® and 20 units of BOTOX® – which were compared to
40 units of Jeuveau®. In addition to evaluating the safety,
efficacy and duration of effect.
About Evolus, Inc.
Evolus (Nasdaq: EOLS) is a performance beauty company evolving
the aesthetic neurotoxin market for the next generation of beauty
consumers through its unique, customer-centric business model and
innovative digital platform. Our mission is to become a global,
multi-product aesthetics company based on our flagship product,
Jeuveau® (prabotulinumtoxinA-xvfs), the first and only neurotoxin
dedicated exclusively to aesthetics and manufactured in a
state-of-the-art facility using Hi-Pure™ technology. Evolus is
expanding its product portfolio having entered into a definitive
agreement to be the exclusive U.S. distributor of Evolysse™, a line
of five unique dermal fillers currently in late-stage development.
Visit us at www.evolus.com, and follow us on LinkedIn, Twitter,
Instagram or Facebook.
1 Within this press release, “profitability” is defined as
achieving positive non-GAAP operating income. 2 Represents
cumulative statistics from the launch of Jeuveau® in May 2019
through September 30, 2023. 3 Represents cumulative statistics from
the launch of Evolus Rewards in May 2020 through September 30,
2023.
Forward-Looking Statements
This press release contains forward-looking statements as
defined under the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties, including statements about
future events, our business, financial condition, results of
operations and prospects, our industry and the regulatory
environment in which we operate. Any statements contained herein
that are not statements of historical or current facts are
forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “will,” “would” or the
negative of those terms, or other comparable terms intended to
identify statements about the future. The company’s forward-looking
statements include, but are not limited to, statements related to
market conditions and consumer demand; benefits expected from
Jeuveau® “Extra-Strength”, if approved; the company’s long-term
revenue outlook and its financial outlook for 2023; and the
company’s cash position and expectations for reaching profitability
and funding the company’s operations.
The forward-looking statements included herein are based on our
current expectations, assumptions, estimates and projections, which
we believe to be reasonable, and are subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by the forward-looking statements.
These risks and uncertainties, all of which are difficult or
impossible to predict accurately and many of which are beyond our
control, include, but are not limited to uncertainties associated
with our ability to comply with the terms and conditions in the
Medytox Settlement Agreements, our ability to fund our future
operations or obtain financing to fund our operations, unfavorable
global economic conditions and the impact on consumer discretionary
spending, uncertainties related to customer and consumer adoption
of Jeuveau® and EvolysseTM, the efficiency and operability of our
digital platform, competition and market dynamics, our ability to
successfully launch and commercialize our products in new markets,
including the EvolysseTM dermal filler product line in the U.S.,
our ability to maintain regulatory approvals of Jeuveau® or obtain
regulatory approvals for new product candidates or indications, our
reliance on Symatese to achieve regulatory approval for the
EvolysseTM dermal filler product line in the U.S., and other risks
described in our filings with the Securities and Exchange
Commission, including in the section entitled “Risk Factors” in our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2023
filed with the Securities and Exchange Commission (“SEC”) on August
2, 2023 and our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2023 expected to be filed with the SEC on or about
November 7, 2023. These filings can be accessed online at
www.sec.gov. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. Except as required by law, we undertake no obligation to
update or revise any forward-looking statements to reflect new
information, changed circumstances or unanticipated events. If we
do update or revise one or more of these statements, investors and
others should not conclude that we will make additional updates or
corrections.
Use of Non-GAAP Financial Measures
Evolus’ financial results are prepared in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). This press release and the reconciliation tables
included in the financial schedules below include adjusted gross
profit, adjusted gross profit margin, non-GAAP operating expenses
and non-GAAP loss from operations. Adjusted gross profit is
calculated as gross profit excluding amortization of an intangible
asset. Adjusted gross profit margin is defined as adjusted gross
profit as a percentage of total net revenues. Non-GAAP operating
expenses and non-GAAP loss from operations exclude (i) product cost
of sales, in the case of non-GAAP operating expenses only, (ii) the
revaluation of contingent royalty obligations, (iii) stock-based
compensation expense, and (iv) depreciation and amortization.
Management believes that adjusted gross profit margin is an
important measure for investors because management uses adjusted
gross profit margin as a key performance indicator to evaluate the
profitability of sales without giving effect to costs that are not
core to our cost of sales, such as the amortization of an
intangible asset. Management believes that non-GAAP operating
expenses and non-GAAP loss from operations are useful in helping to
identify the company’s core operating performance and enables
management to consistently analyze the period-to-period financial
performance of the core business operations. Management also
believes that non-GAAP operating expenses and non-GAAP loss from
operations will enable investors to assess the company in the same
way that management has historically assessed the company’s
operating expenses against comparable companies with conventional
accounting methodologies. The company’s definitions of adjusted
gross profit, adjusted gross profit margin, non-GAAP operating
expenses and non-GAAP loss from operations have limitations as
analytical tools and may differ from other companies reporting
similarly named measures. Non-GAAP measures should not be
considered measures of financial performance under GAAP, and the
items excluded from such non-GAAP measures should not be considered
in isolation or as alternatives to financial statement data
presented in the financial statements as an indicator of financial
performance or liquidity. Non-GAAP measures should be considered in
addition to results prepared in accordance with GAAP but should not
be considered a substitute for or superior to GAAP results.
For a reconciliation of our historical adjusted gross profit
margin, non-GAAP operating expenses and non-GAAP loss from
operations presented herein to gross profit margin, GAAP operating
expenses and GAAP loss from operations, the most directly
comparable GAAP financial measures, please see “Reconciliation of
Gross Profit Margin to Adjusted Gross Profit Margin,”
“Reconciliation of GAAP Operating Expenses to Non-GAAP Operating
Expenses” and “Reconciliation of GAAP (Loss) from Operations to
Non-GAAP (Loss) from Operations” in the financial schedules below.
In addition, this press release includes information regarding the
company’s expected adjusted gross profit margin and non-GAAP
operating expenses for full year 2023. Evolus has not provided a
reconciliation of such forward-looking non-GAAP adjusted gross
profit margin, non-GAAP operating expenses or non-GAAP operating
income because a reconciliation of such measures to GAAP gross
profit margin, GAAP operating expenses and GAAP operating income,
respectively, the most directly comparable GAAP financial measures,
is not available without unreasonable efforts. This is due to the
inherent difficulty of forecasting the timing or amount of various
reconciling items that would impact the forward-looking outlook for
these non-GAAP financial measures that have not yet occurred and/or
cannot be reasonably predicted. Such unavailable information could
have a significant impact on Evolus’ GAAP financial results.
Jeuveau® and Nuceiva® are registered trademarks of Evolus, Inc.
Evolysse™ is a trademark of Evolus, Inc. Hi-Pure™ is a trademark of
Daewoong Pharmaceutical Co, Ltd. BOTOX® is a registered trademark
of Allergan Inc.
Evolus, Inc.
Consolidated Statements of
Operations and Comprehensive Loss
(Unaudited, in thousands,
except loss per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue:
Product revenue, net
$
49,323
$
33,215
$
139,050
$
103,604
Service revenue
696
684
2,036
1,366
Total net revenues
50,019
33,899
141,086
104,970
Operating expenses:
Product cost of sales (excludes
amortization of intangible assets)
15,431
13,490
42,289
42,517
Selling, general and administrative
43,328
34,794
121,886
105,111
Research and development
1,587
1,376
4,176
3,394
In-process research and development
—
—
4,441
2,000
Revaluation of contingent royalty
obligation payable to Evolus Founders
1,802
1,216
5,132
3,946
Depreciation and amortization
1,311
920
3,760
2,695
Total operating expenses
63,459
51,796
181,684
159,663
Loss from operations
(13,440
)
(17,897
)
(40,598
)
(54,693
)
Other income (expense):
Interest income
306
38
569
42
Interest expense
(3,786
)
(2,343
)
(9,757
)
(6,466
)
Other income (expense), net
21
(62
)
2
(93
)
Loss before income taxes:
(16,899
)
(20,264
)
(49,784
)
(61,210
)
Income tax expense
24
12
70
38
Net loss
$
(16,923
)
$
(20,276
)
$
(49,854
)
$
(61,248
)
Other comprehensive loss:
Unrealized loss, net of tax
(138
)
(203
)
(269
)
(368
)
Comprehensive loss
$
(17,061
)
$
(20,479
)
$
(50,123
)
$
(61,616
)
Net loss per share, basic and diluted
$
(0.30
)
$
(0.36
)
$
(0.88
)
$
(1.09
)
Weighted-average shares outstanding used
to compute basic and diluted net loss per share
57,023
56,177
56,808
55,998
Evolus, Inc.
Summary of Consolidated
Balance Sheet Data
(Unaudited, in
thousands)
September 30, 2023
December 31, 2022
Cash and cash equivalents
$
38,685
$
53,922
Accounts receivable, net
30,464
22,448
Inventories
17,626
18,852
Prepaid expenses and other current
assets
5,224
5,580
Total current assets
91,999
100,802
Noncurrent assets
75,972
77,181
Total assets
$
167,971
$
177,983
Accounts payable and accrued expenses
$
38,473
$
33,729
Accrued litigation settlement
—
5,000
Other current liabilities
10,067
7,780
Total current liabilities
48,540
46,509
Term loan, net of discount and issuance
costs
95,094
71,879
Other noncurrent liabilities
43,705
41,096
Total liabilities
$
187,339
$
159,484
Total stockholders’ equity
(deficit)
$
(19,368
)
$
18,499
Evolus, Inc.
Summary of Consolidated Cash
Flows
(Unaudited, in
thousands)
Nine Months Ended September
30,
Three Months Ended September
30,
2023
2022
2023
Net cash (used in) provided by:
Operating activities
$
(34,821
)
*
$
(76,138
)
*
$
(924
)
Investing activities
(1,266
)
(1,548
)
(539
)
Financing activities
21,119
(2,630
)
(1,419
)
Effect of exchange rates on cash
(269
)
(368
)
(138
)
Change in cash and cash equivalents
(15,237
)
(80,684
)
(3,020
)
Cash and cash equivalents, beginning of
period
53,922
146,256
41,705
Cash and cash equivalents, end of
period
$
38,685
$
65,572
$
38,685
*Includes a settlement payment of
$5.0 million and $15.0 million to Allergan/Medytox in the nine
months ended September 30, 2023 and 2022, respectively.
Evolus, Inc.
Reconciliation of Gross Profit
Margin to Adjusted Gross Profit Margin
(Unaudited, in
thousands)
Three Months Ended September
30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Total net revenues
$
50,019
$
33,899
$
141,086
$
104,970
Cost of sales:
Product cost of sales (excludes
amortization of intangible assets)
15,431
13,490
42,289
42,517
Amortization of distribution right
intangible asset
738
739
2,216
2,216
Total cost of sales
16,169
14,229
44,505
44,733
Gross profit
33,850
19,670
96,581
60,237
Gross profit margin
67.7
%
58.0
%
68.5
%
57.4
%
Add: Amortization of distribution right
intangible asset
738
739
2,216
2,216
Adjusted gross profit
$
34,588
$
20,409
$
98,797
$
62,453
Adjusted gross profit margin
69.1
%
60.2
%
70.0
%
59.5
%
Evolus, Inc.
Reconciliation of GAAP
Operating Expenses to
Non-GAAP Operating
Expenses
(Unaudited, in
thousands)
Three Months Ended September
30,
Nine Months Ended
September 30,
Three Months Ended June
30,
2023
2022
2023
2022
2023
GAAP operating expense
$
63,459
$
51,796
$
181,684
$
159,663
$
64,464
Adjustments:
Product cost of sales (excludes
amortization of intangible assets)
15,431
13,490
42,289
42,517
14,712
Revaluation of contingent royalty
obligation
1,802
1,216
5,132
3,946
1,682
Stock-based compensation:
Included in selling, general and
administrative
4,295
2,398
11,445
8,236
3,983
Included in research and development
301
85
616
185
188
Depreciation and amortization
1,311
920
3,760
2,695
1,247
Non-GAAP operating expense
$
40,319
$
33,687
$
118,442
$
102,084
$
42,652
Evolus, Inc.
Reconciliation of GAAP (Loss)
from Operations to
Non-GAAP (Loss) from
Operations
(Unaudited, in
thousands)
Three Months Ended September
30,
Nine Months Ended
September 30,
Three Months Ended June
30,
2023
2022
2023
2022
2023
GAAP (loss) from operations
$
(13,440
)
$
(17,897
)
$
(40,598
)
$
(54,693
)
$
(15,118
)
Adjustments:
Revaluation of contingent royalty
obligation
1,802
1,216
5,132
3,946
1,682
Stock-based compensation:
Included in selling, general and
administrative
4,295
2,398
11,445
8,236
3,983
Included in research and development
301
85
616
185
188
Depreciation and amortization
1,311
920
3,760
2,695
1,247
Non-GAAP (loss) from operations
$
(5,731
)
$
(13,278
)
$
(19,645
)
$
(39,631
)
$
(8,018
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107569049/en/
Investor Contact: Ned Mitchell
Investor Relations Tel: 949-966-1798 Email: ir@evolus.com
Media Contact: Email:
media@evolus.com
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